Posts Tagged ‘arbitration’

Amtrak Seeks Dismissal of Arbitration Lawsuit

March 3, 2020

Amtrak is seeking to have a court dismiss a lawsuit that contends the passenger carrier violated the law when it included a mandatory arbitration clause in its condition of carriage contract.

Amtrak attorneys filed a motion to dismiss the suit, claiming the plaintiffs lack standing to sue and that the constitutional claims made in the lawsuit are invalid.

The lawsuit was filed by Public Citizen, an advocacy group on behalf of consumer rights.

In its motion, Amtrak said one of the two listed plaintiffs has not bought an Amtrak ticket and neither of the listed plaintiffs have been subjected to the arbitration clause.

As for the constitutional claims in the lawsuit, Amtrak said it “is not the government for purposes of implementing an arbitration agreement and so no constitutional claim can stand.”

The passenger carrier argued that even if a court were to rule that it is considered the government, “it is well established that government arbitration poses no per se constitutional problem.”

Amtrak lawyers have also argued that the lawsuits constitutional arguments are “so expansive in application that they could derail both public and private arbitration.”

Amtrak Arbitration Clause Continues to Draw Fire

December 14, 2019

The arbitration clause that Amtrak foisted onto its passengers earlier this year has drawn opposition from 32 groups that have asked Congress to overturn it.

The groups in a letter to Congress described the arbitration clause as a “secret justice system” that is bad for consumers.

“[Amtrak’s arbitration] provision states that it is ‘intended to be as broad as legally possible’ – applying not only to individuals who buy tickets, but to ‘family members, minor passengers, colleagues and companies’ for whom tickets are bought,” wrote Public Citizen. “The provision also lists a litany of claims that cannot be heard in court, including negligence, gross negligence, disfigurement, wrongful death, medical and hospital expenses, discrimination and failure to accommodate an actual or perceived disability.”

The arbitration clause has already drawn criticism from some members of Congress.

House Railroads Subcommittee Chair Dan Lipinski (D-Illinois) said during an Amtrak reauthorization hearing that his committee is looking at ways to void the arbitration clause.

“Apparently there is not anything to bar forced arbitration for an Amtrak passenger, so that is something that we’re now starting to look at legislatively,” Lipinski said.

For its part, Amtrak has told Congress that arbitration provides a more efficient process when they have claims that can’t be resolved directly with Amtrak.

The passenger carrier said in a letter to lawmakers that it implemented the arbitration clause in an effort to follow a congressional directive to save money.

Amtrak noted that its legal costs have been more than $11 million during the past five years.

The website Politico said the letter was a response to congressional criticism.

However, Politico reported that House Transportation Committee Chairman Peter DeFazio (D-Oregon) said he still thinks the policy “goes too far in limiting opportunities for the customers and American public to hold Amtrak accountable by raising serious issues in a public forum.”

Senators Demand Amtrak End Forced Arbitration

December 4, 2019

Pressure is growing on Amtrak to eliminate a requirement that passengers submit to arbitration rather than filing lawsuits to resolve disputes with the passenger carrier.

Thirteen U.S. senators have written to Amtrak CEO Richard Anderson to ask that the arbitration clause be removed from the contract of carriage that passengers agree to when buying tickets even if most of them are unlikely to know that.

The senators, led by Sen. Richard Blumenthal (D-Connecticut), told Anderson in the letter that the arbitration policy “is gravely imperiling traveling Americans’ access to justice and public accountability.”

The letter said the arbitration agreement is “particularly disturbing due to its broadness of scope,” which includes personal injury claims and wrongful death. It would also eliminate potential class-action suits.

In response Anderson rejected the request, saying that arbitration expedites the resolution of disputes at lower cost.

Amtrak quietly imposed the arbitration requirement last January.

“Agreements to arbitrate are desirable precisely because they trade the procedures of federal courts for the simplicity, informality, and expedition of arbitration,” Anderson said.

He said money saved resolving disputes through arbitration instead of in court “can then be spent in safety programs and other passenger service and care programs.”

Blumenthal said Anderson’s response was to be expected. “They say it costs less, it’s quicker, but the rights of plaintiffs are vastly undercut,” Blumenthal said.

The Connecticut senator has introduced legislation to invalidate all forced-arbitration agreements.

Amtrak Quietly Imposed Arbitration on Passengers

November 12, 2019

Amtrak quietly has changed the “terms and conditions” of tickets to prohibit passengers from suing the carrier if they suffer injuries while riding trains.

Instead, Amtrak is now forcing aggrieved passengers to submit to binding arbitration.

The arbitration clause effectively prohibits passengers from suing Amtrak for claims “including, but not limited to . . . negligence, gross negligence, physical impairment, disfigurement, pain and suffering, mental anguish, wrongful death, survival actions, loss of consortium and/or services, medical and hospital expenses, expenses of transportation for medical treatment, expenses of drugs and medical appliances, emotional distress, exemplary or punitive damages arising out of or related to any personal injury.”

It also requires that arbitration cases be individual and prohibits class or group actions.

The arbitration clause appears about two-thirds of the way into the 15,500 word statement of terms and conditions that few passengers are likely to read.

Industry observers say the arbitration clause was added after Amtrak paid a $265 million court settlement stemming from a May 12, 2015, derailment in Philadelphia that left eight dead and 238 injured.

The arbitration settlement clause was imposed in January and received little attention until it was reported by the website Politico last week.

The arbitration clause is expected to be the subject of discussion on Wednesday at a hearing on Amtrak by the House Transportation Subcommittee on Railroads, Pipelines and Hazardous Materials.

The Senate Commerce Committee is also expected to review the issue.

Senator Richard Blumenthal (D-Connecticut) said his office is reviewing the matter.

“‘There’s no reason why consumer complaints about Amtrak should involve mandatory arbitration,” he said. “Consumers might wish to have arbitration . . . but they shouldn’t be forced to.”

By federal law, airlines are banned from imposing arbitration clauses, but many bus operators, cruise ship lines and rideshare companies already have arbitration clauses that prohibits post-accident passenger/survivor lawsuits.

“‘It is one of the most anti-consumer and passenger clauses I’ve ever seen,’ said Julia Duncan, Senior Director for Government Affairs at the American Association for Justice, which represents trial lawyers, in an interview with Politico.

She said Amtrak’s arbitration clause is unusually broad and detailed. It describes a wide array of possible incidents that would have to go to arbitration.

“Most forced arbitration clauses do not go into much detail about what they cover,” Duncan said.

Amtrak spokesperson Kimberly Woods told Politico the clause was added to resolve customer claims more efficiently, adding that it won’t affect most customer complaints, which are settled directly with the carrier.

Generally, legal observers say, the courts have upheld arbitration clauses because no one is forcing the consumer to buy a particular product.

One source told Politico that forcing customers into arbitration is “the hot new strategy all across corporate America.”

Amtrak Wants Passengers to Agree to Arbitration

June 24, 2019

Amtrak has joined a growing movement of forcing dissatisfied customers to go to arbitration to resolve dispute.

However, the Rail Passengers Association said the policy leaves a lot of unanswered questions, including for group travel because there is no legal authority to accept arbitration terms on behalf of individual travelers.

On it website, RPA said Amtrak’s consumer-arbitration provisions are drawing attention, but the current political climate had made it nearly impossible to fight back.

RPA said arbitration has become the de facto standard throughout the U.S. economy and the courts, Congress and executive branch have all shown little willingness to change it.

Companies typically require customers to sign an agreement when purchasing a produce or service to take disputes before an American Arbitration Association arbitrator rather than going to court.

In a statement posted on its website earlier this year, Amtrak contended that arbitration is more efficient than drawn out legal proceedings and less costly. The statement also contended that passengers could contact Amtrak directly to work out claims rather than go to arbitration.

Consumer advocacy groups argue that forcing customers into binding arbitration agreements effectively means they are signing away their right to civil remedies in court.

They say that the results of arbitration are often worse for consumers than civil court proceedings.

RPA said passengers have few options to avoid arbitration. They could refuse to buy tickets under those terms but that would mean not being able to travel.

They could also file suit in a federal court and argue that their claim or dispute is barred from arbitration by federal law.